Opinion
02 Civ. 3374 (TPG).
August 31, 2006
OPINION
This is a dispute about residual assets of a pension plan. The plan was administered by defendant Metropolitan and the assets in dispute are being held by defendant Mellon.
The actual dispute is between plaintiff Lockheed and defendant Singer N.V. (hereinafter "Singer"), Lockheed's predecessor, known in this litigation as Old Singer, spun off its sewing machine business to Singer's predecessor, SSMC. A 1986 Transfer Agreement governed the reorganization.
On September 21, 2004, the court denied Singer's motion for judgment on the pleadings and Lockheed's motion for summary judgment. The court also instructed the parties to conduct additional discovery insofar as it might shed light on the intent of the parties when drafting the 1986 Transfer Agreement. Lockheed Martin Corp. v. Singer N.V., No. 02 Civ. 3374, 2004 WL 2101924, at *2 (S.D.N.Y. Sept. 21, 2004). Familiarity with that opinion is assumed.
Lockheed now renews its motion for summary judgment. The motion is again denied.
DISCUSSION
Lockheed claims that further discovery has demonstrated that the intention of the parties to the Transfer Agreement was to have Old Singer retain the EOFS Plan. Lockheed also raises for the first time the issue of whether Singer waived any claim to the EOFS plan in a 1992 bankruptcy settlement.
Lockheed first relies on the December 14, 2004 deposition testimony of Philip Watson in support of its claim. Watson is Singer's current General Counsel and was the then-General Counsel of Old Singer at the time of the Transfer Agreement. Lockheed contends that Watson admitted in his testimony that the subject of pensions in the Transfer Agreement was controlled by Article VIII of the Agreement, which listed certain pension plans to be transferred but did not mention the EOFS Plan at dispute in this litigation. According to Lockheed, since the EOFS Plan was not mentioned in Article VIII, it was not transferred. Singer's position is that Article VIII was a non-exclusive list of pensions to be transferred, and that as a plan primarily covering sewing business workers, the EOFS Plan was transferred pursuant to Article II, which calls for the transfer of all sewing assets of Old Singer.
The testimony of Watson that Lockheed relies upon is as follows:
Q. Was [Article VIII] intended to be the provision for the agreements controlling [pension and employee benefits]?
A. To the extent covered, yes.
Watson Dep. 65:15-18. Watson's actual testimony thus did not involve any clear-cut admission that Article VIII controlled the entire subject of the transfer of pension plans.
Moreover, later in the same deposition, Watson unequivocally contradicted Lockheed's position when he stated his belief that Section 2.01 of Article II — a general provision purporting to transfer Old Singer's sewing assets to SSMC — acted to transfer the EOFS Plan:
Q. Do you have any belief as to whether the [EOFS Plan]of Old Singer was to be transferred to SSMC pursuant to the spin-off agreement?
* * *
A. I believe that it was transferred.
* * *
Q. And what provision or provisions [provided for such transfer]?
A. The general transfer of assets provisions
Q. Would you take a moment and just tell us the numbers of the provisions that you rely on?
A. Section 2.01.Watson Dep. 92:24-93:3; 93:12; 93:24-94:7.
Lockheed next argues for summary judgment on the basis of two 1989 letters sent to EOFS Plan participants by Linda Zellinger, SSMC's manager of pensions at the time. In those letters, Zellinger told two EOFS participants that Old Singer was responsible for its payments. This evidence is not an appropriate basis for summary judgment in Lockheed's favor, as it does not demonstrate that the Transfer Agreement failed to transfer the EOFS Plan to SSMC. As Ms. Zellinger explained in a deposition taken on December 2, 2004, she was not employed at SSMC until years after the 1986 Transfer Agreement (and shortly after a two-year transition period when Old Singer continued to administer SSMC's pension plans). Indeed, Zellinger was not familiar with the Transfer Agreement and relied on information provided to SSMC by Old Singer when writing to EOFS Plan participants. In short, these letters are not probative of what effect the Transfer Agreement had on the EOFS Plan.
Finally, Lockheed argues that SSMC (and thus Singer as its successor in interest) waived any rights it might have had to the EOFS Plan in a 1992 bankruptcy settlement.
In 1989, Old Singer — by then doing business as the BiCoastal Corporation — filed for Chapter 11 protection in the Middle District of Florida. SSMC filed a Proof of Claim in which it alleged certain breaches of the 1986 Transfer Agreement. The Proof of Claim did not mention the EOFS Plan or GAC 365F. In 1992, the Bankruptcy Court approved a settlement between SSMC and BiCoastal and dismissed SSMC's Proof of Claim.
Lockheed now argues that Singer is precluded from claiming a right to the EOFS Plan or GAC 365F because SSMC made no claim to those assets in its Proof of Claim or its settlement with BiCoastal. Lockheed argues that because the settlement did not give SSMC any rights to the EOFS Plan or GAC 365F, the confirmed reorganization extinguished any rights that the 1986 Transfer Agreement might have given them in those assets. See 11 U.S.C. § 1141(a); In re Friedberg, 192 B.R. 338, 341 (S.D.N.Y. 1996).
The problem with Lockheed's argument is that it begs the question at the center of this litigation: whether the 1986 Transfer Agreement transferred control of the EOFS Plan and its assets (including GAC 365F) to SSMC. If it did authorize such a transfer, then SSMC hardly needed to file any claim to those assets, as the EOFS Plan was fully funded and GAC 365F was being held by MetLife for the benefit of the owner of the EOFS Plan. Thus, regardless of whether 1986 Transfer Agreement transferred the assets of the EOFS Plan, at the time of the bankruptcy, GAC 365F was not "held by" BiCoastal, but by MetLife. If the Transfer Agreement made SSMC the rightful beneficiary of GAC 365F, then BiCoastal's bankruptcy would not affect that interest. (And, of course, if the Transfer Agreement did not transfer Old Singer's interest in the EOFS Plan, the bankruptcy issue a moot point.)
CONCLUSION
At the court's instruction, the parties have engaged in discovery aimed at determining the intent of the Transfer Agreement as to the EOFS Plan and its assets. Despite Lockheed's arguments to the contrary, it is apparent for the aforementioned reasons that the additional discovery has not yielded any dispositive evidence. Accordingly, Lockheed's renewed motion for summary judgment is denied.
SO ORDERED.